Sylvia Nasar's 'Grand Pursuit' puts bleak economy into perspective

Petros Giannakouris, APAs Greece teeters closer to default, thousands of protests shouted in Athens Wednesday, Sept. 21, against austerity measures. "Economic diseases are highly communicable," Franklin Delano Roosevelt warned an international monetary conference in July, 1944. "It follows therefore that the economic health of every country is a proper matter of concern to all its neighbors, near and far."

Following World War I, the Austrian krone was so nearly worthless that when Sigmund Freud published a scholarly article, he accepted his pay in potatoes.

During the Great Depression, the economics genius John Maynard Keynes became so strapped for cash that he tried to sell his two best paintings, including Matisse's "Deshabille." He found no buyers.

A few years later, the malevolent and economically illiterate Joseph Stalin reacted to a shortage of small coins in the Soviet Union by having "several dozen bank cashiers shot."

All these eyebrow-exercising tidbits arrive in "Grand Pursuit," a fascinating excursion into the economic ideas and personalities that have deposited most of us at a standard of living unparalleled in human history.

Not feeling particularly flush?

Author Sylvia Nasar wants readers to know that since Stalin's day, the world's population is six times greater, but 10 times more affluent. And that "the average Chinese lives at least as well today, if not better, than the average Englishman did in 1950."

In the epilogue to her engrossing book, Nasar writes, "Economic calamities -- financial panics, hyperinflations, depressions, social conflicts and wars -- have always triggered crises of confidence, but they have not come close to wiping out the cumulative gains in average living standards."

Nasar wrote these words before the U.S. Census revealed its latest data showing that nearly 1 in 6 Americans are poor. Cleveland ranks as the third most impoverished big city, behind Detroit and San Bernardino, Calif. The 2010 census found 34 percent of Cleveland's citizenry living at or below the poverty line.

The chipper Nasar, a business journalism professor at Columbia University, plies her optimism by staking out a very long view. She narrates a clever fast-draw version of "Grand Pursuit" for youtube. She starts by noting that two centuries ago, the average resident of England lived scarcely better than a Roman slave.

"The idea that humanity could turn tables on economic necessity -- mastering rather than being enslaved by material circumstances -- is so new that Jane Austen never entertained it," she begins.

That revolution sputtered to life in the 1840s, when wealth in Victorian England began outstripping population growth, and the chance to occasionally eat meat became more widespread.

Nasar, who wrote "A Beautiful Mind," the luminous 1998 biography of mathematician John Nash, is drawn to intellectual giants. They stomp across the idiosyncratic and readable pages of "Grand Pursuit," which unfurls with a David McCullough-like knack for telling popular history.

So Karl Marx begins conversations with the salvo, "I am going to annihilate you," and publishes "Das Kapital" in 1867 without having visited a factory. Meanwhile, the truer father of modern economics, a modest mathematician named Alfred Marshall, spent his career investigating workshops to show that improving productivity could create wealth.

Nasar revels in the quirks of her economists, their habits of speech and the moments when they ignore their own advice. She spends a surprising number of pages on their courtships and marriages. She admits to her own stupefaction that, occasionally, "such smart men could be so stupid or so bad."

Still, the trajectory is bracing, and Nasar writes lines good enough to steal. She also plucks sentences from novels of the day -- "Middlemarch," "The Thin Man" -- to smartly telegraph the conventions of their eras.

She has a relaxed way with math, conveying the kick in the back-of-the napkin calculation of Keynes that correctly predicted how fast the U.S. postwar economy might grow, and the enviable merit in a breakthrough dissertation on the interdependence of pricing that holds up to this day.

What is thrilling, in the midst of our sputtering economy and internecine politics, is the reader's inevitable sense of deja vu. Keynes called it "the political problem of mankind: how to combine three things: economic efficiency, social justice and individual liberty."

Nasar crafts her book in three "acts," but once Keynes dies in 1946, it begins to droop. The romance of British economist Joan Robinson with Soviet central planning feels like an unnecessary cul-du-sac. And the final chapter on Nobel Laureate Amartya Sen reads like a thin stretch toward uplift.

Nevertheless, "Grand Pursuit" is a robust reminder of what we have learned:

"Inflation could lift output in the short run but not the long run. Gains in productivity are the primary driver of wages and living standards. Education and a safety net could reduce poverty without producing economic stagnation. A stable currency was necessary for economic stability, a healthy financial system is essential for innovation."

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